Wed, Mar. 25, 10:19 AM
- Berkshire Hathaway (BRK.A, BRK.B) owns 51% of Heinz, and Berkshire/3G will own 51% of the new Kraft Heinz, meaning Berkshire will wind up with a bit more than 25% of the combined entity.
- Where this deal differs from Heinz is that existing Kraft shareholders will keep their stock, and will own 49% of the merged - publicly traded - firm.
- It's a score for Buffett, as Berkshire will own more than 300M shares of the new firm, and will have paid less than $30 each for them. Pulling out the $16.50 per share special dividend due to Kraft owners as part of deal, Berkshire has more than doubled its money, based where Kraft is currently trading.
- Naturally, The Oracle has no intention of taking profits. “You won’t see Berkshire reduce its interest,” says Buffett. “We will be in this stock forever.”
- Source: WSJ
- Previously: Kraft, Heinz announce merger (March 25)
Wed, Mar. 25, 6:23 AM
- H.J. Heinz, owned by P-E firm 3G Capital and Berkshire Hathaway (BRK.A, BRK.B), and Kraft (NASDAQ:KRFT) have entered into a definitive merger agreement to create The Kraft Heinz Company, forming the third largest food and beverage company in North America.
- Heinz shareholders will own a 51% stake in the combined company, while Kraft shareholders will hold a 49% stake and receive a special cash dividend of $16.50 per share.
- Together the new company will have eight $1B+ brands and five brands between $500M-$1B.
- "I am delighted to play a part in bringing these two winning companies and their iconic brands together. This is my kind of transaction," said Berkshire Hathaway CEO Warren Buffett.
- 3G previously took Burger King private in 2010, bought Tim Hortons last year through the holding and teamed up with Berkshire Hathaway two years ago to buy Heinz for $23B.
- Kraft’s revenue last year was effectively flat at $18B and net profit fell 62% to $1B, due to higher commodity costs and big charges related to its post-employment benefit plans.
- Previously: Kraft now +16.5% on buyout report; MDLZ, CAG also gain (Mar. 24 2015)
- KRFT +15.8% premarket.
Tue, Mar. 17, 10:58 AM
- The Keystone pipeline disappointment is hardly a death knell for TransCanada (NYSE:TRP), as the company remains one of the top holdings in Skip Aylesworth’s Hennessy Gas Utility fund, which climbed 21% last year as distribution gains trumped price drops.
- TRP is "a fine, healthy company and, yes, this is a hiccup, and they would love to see Keystone happen, but it is just a part of their business," Aylesworth tells Barron's.
- Of one Aylesworth's favorite energy investments actually is Berkshire Hathaway (BRK.A, BRK.B), which is heavily involved in the distribution of natural gas and owner of Burlington Northern, which is exploring using natural gas to fuel long-distance freight trains.
- Other favorites: ENB, WMB, LNG, NJR, KMI, SE
Tue, Mar. 17, 8:59 AM
- BNSF Railway (BRK.A, BRK.B) is sued by a trade group for 400 U.S. refining and petrochemical makers objecting to a $1,000 surcharge the company tacked onto older model tank cars.
- The American Fuel & Petrochemical Manufacturers says the surcharge is designed to encourage shippers to retrofit or scrap older tank cars in favor of safer “jacketed” models that are not required by federal regulators.
- The surcharge adds $1.50/bbl to shipping costs, according to the trade group, which represents ~95% of U.S. refining capacity; BNSF began adding the fee on Jan. 1.
- BNSF hauls more than 600K bbl/day of crude, including more than half of the oil pumped from the Bakken formation in North Dakota and Montana.
Sat, Mar. 14, 10:41 AM
- BYD Company sold a subsidiary to Holitech this week for 2.3B yuan ($368M).
- The Chinese company said in its filing with the Hong Kong exchange that it intends to allocate more resources to develop its new-energy vehicle business to expand on existing levels of electric car and bus production.
- A new 3B yuan ($479M) bond offering from BYD is also in the works.
- BYD is emerging as the main competitor to Tesla Motors (NASDAQ:TSLA) in the electricity storage industry with plans to triple battery production.
- Execs with BYD maintain the company could produce ~34 GWh of battery capacity by 2020 if demand trends are strong - a pace that rivals projections for Tesla's Gigafactory production.
- Berkshire Hathaway (BRK.A, BRK.B) owns a sizable stake in BYD Company (OTCPK:BYDDY, OTCPK:BYDDF).
- BYD's aggressive positioning could have some impact on companies tied to the lithium industry.
- Potential lithium plays: OTCPK:PCRFY, ARTX, SQM, ENS, OTCQX:WLCDF, FMC, LIT (add your own in the comment stream).
- Previously: Dark cloud over China auto market (March 4)
Thu, Mar. 12, 8:10 AM
- Canada proposes tough new oil tank car standards and says even improved tank cars coming into service now would have to be off the rails by 2025 at the latest.
- New cars would need thicker tank car walls and an outer cover for thermal protection.
- The announcement comes after a recent series of fiery derailments in Canada and the U.S., including some that involved the newer, improved rail cars, and as more oil increasingly travels by rail due to rising production and a shortage of pipelines.
- The move signals that the U.S. may adopt similar regulations and will increase pressure on the rail car industry to produce enough new cars on a tighter deadline.
- Relevant tickers: CNI, CP, CSX, UNP, KSU, NSC, GWR, BRK.A, BRK.B, GBX, TRN, ARII, RAIL, WAB
Tue, Mar. 10, 7:25 PM
- Canada and the U.S. are "very close" to announcing stronger new oil tanker rail car standards, intended to limit fires and pollution when oil trains derail, Canadian Transport Minister Lisa Raitt says.
- A recent spate of fiery oil tanker accidents, including three derailments in just the past month from Canadian National Railway (NYSE:CNI), has ratcheted up the pressure on both governments to take action.
- Raitt is recommending that Canada's House of Commons transport committee summon CNI to explain its recent accidents.
- Meanwhile, officials from large rail operators met with White House staff last week to argue against the need for electronically controlled pneumatic brakes, saying they would be costly and not add significant safety benefits.
- Other relevant tickers: CP, CSX, UNP, KSU, NSC, GWR, BRK.A, BRK.B, GBX, TRN, ARII, RAIL, WAB
Tue, Mar. 10, 9:45 AM
- "This is the beginning of a journey that will have no end," says Warren Buffett upon completion of Berkshire Hathaway's (BRK.A, BRK.B) purchase of Van Tuyl, the country's largest privately-held auto dealer. "[The] business will be thriving and growing 50 and 100 years from now. The fun has just started."
- "Every managing partner has enthusiastically committed to stay on with Berkshire Hathaway Automotive."
- Source: Press Release
- Previously: Buffett picks up auto dealership group (Oct. 2, 2014)
Fri, Mar. 6, 12:34 PM
- The two rail cars that split open and burst into flames during yesterday's oil train derailment in Illinois were retrofitted with protective shields to meet a higher safety standard than federal law requires, BNSF Railway (BRK.A, BRK.B) says.
- The train’s tank cars were the newer 1232 model, which was designed during safety upgrades voluntarily adopted by the industry in hopes of keeping cars from rupturing during derailments, but 1232 cars involved in three other accidents - including one last month in West Virginia involving a train carrying 3M gallons of North Dakota crude - have split open in the past year.
- The local sheriff says the train yesterday was transporting oil from the Bakken region.
Thu, Mar. 5, 6:20 PM
- A BNSF Railway (BRK.A, BRK.B) train with 103 crude cars and two sand cars derailed this afternoon near Galena, Ill., with at least eight cars reportedly off the tracks and at least one emitting smoke.
- The county sheriff’s reportedly said several cars have caught fire but that it had not yet prompted any evacuations.
Wed, Mar. 4, 7:22 AM
- U.S. companies are raising cash from European bond sales as fast as their bankers can draw up the paperwork, thanks to tumbling yields amid the ECB's QE. Around $27.8B of bonds from U.S. borrowers have been issued in Europe this year, according to Dealogic.
- The Oracle's nasty, self-serving recent comments about bankers notwithstanding, Berkshire Hathaway (BRK.A, BRK.B) has hired BAML, Goldman Sachs, Deutsche Bank, and Wells Fargo to manage the debt sale.
- Source: WSJ
Mon, Mar. 2, 7:48 AM
- "When Charlie's letter came in and it referenced Greg and Ajit, it was news to me that he was writing that," Warren Buffett tells CNBC after this weekend's annual investor letters ratcheted up speculation Greg Abel and Ajit Jain were first in line to be the next chiefs at Berkshire Hathaway (BRK.A, BRK.B). There's "no jockeying" at all going on between the two, he says.
- Minimum wage: We could afford to pay $20 nationwide, but there'd be a lot of people without jobs. It "distorts the market."
- IBM: "People have this misconception that - when we buy a stock - we want it to go up. That's the last thing we want it to do ... There's been no surprises at IBM since we started buying it a few years ago ... We expected revenue to come down."
- AXP - The company has a strong position in its antitrust lawsuit (which it just lost, but plans to appeal). The partnership with Costco ended when the two couldn't come to terms.
- Previously: Buffett, Munger talk succession and more in annual letters (Feb. 28)
Mon, Mar. 2, 1:57 AM
- Berkshire Hathaway's (NYSE:BRK.A) (NYSE:BRK.B) Q4 net profit declined 16.7% to $4.16B, or $2,529 per class A share; Operating profit +5% to $3.96B, or $2,412 a share.
- Full-year net profit +2% to $19.87B, or $12,092 a share; operating profit +9.3% to $16.55B, or $10,071 a share.
- Berkshire's 2014 book value per share grew 8.3% after taxes to $146,186.
Sat, Feb. 28, 5:05 PM
- “Both the board and I believe we now have the right person to succeed me as CEO - a successor ready to assume the job the day after I die or step down," writes Warren Buffett in his sizable annual letter to Berkshire Hathaway (BRK.A, BRK.B) shareholders. It's the 50th anniversary of Buffett's time at the helm, and investors are being rewarded with a mammoth letter - 43 pages and 25K words - and a separate letter from Charlie Munger.
- In his letter, Munger suggests reinsurance head Ajit Jain or energy boss Greg Abel as worthy replacements - both, especially Jain, have been on watchers' short lists for some time.
- Both letters are here.
- Breakup? Not anytime soon, as Buffett spends a nice chunk of his letter defending Berkshire's conglomerate structure, though allowing conglomerates "richly deserve(d)" bad reputation with investors. The conglomerate, says Buffett, allows master capital allocators like he and Munger to ... well ... allocate capital.
Wed, Feb. 25, 8:45 AM
- Not scared away by what could be a regional slowdown thanks to the oil crash, Houston-based Berkshire Hathaway (BRK.A, BRK.B) HomeServices Anderson Properties expands its footprint with the purchase of Paradigm AdvantEdge Realty, which operates throughout Ada and Oklahoma City.
- Anderson first entered Oklahoma City last summer with the purchase of Prudential Alliance Realty, and this deal gives Anderson six offices there and in Ada, and nearly 250 agents (Anderson as a whole has about 1K agents now).
- Source: Press release
Fri, Feb. 20, 8:33 AM
- Berkshire Hathaway (BRK.A, BRK.B) agrees to purchase Detlev Louis Motorradvertriebs, a German-based retailer of motorcycle apparel and accessories, for €400M.
- Buffett has been searching for a non-U.S. deal for awhile, and, though this is a small one, The Oracle calls it a "door opener ... I like the fact that we have cracked the code in Germany."
- This fits the mold of a typical Berkshire purchase - Louis is family-owned and had no interest in selling to P-E or to a rival. It will remain a standalone subsidiary of Berkshire to be overseen by Ted Weschler.
BRK.A vs. ETF Alternatives
Berkshire Hathaway Inc is a conglomerate holding company owning subsidiaries engaged in a number of business activities, including property and casualty insurance and reinsurance, utilities and energy, finance, manufacturing, service and retailing.
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